MUSD and it's role in the Bitcoin Cash ecosystem.
MUSD (Moria USD) is a native, over collateralized stable coin built on Bitcoin Cash (BCH), developed by Riften Labs via the Moria Protocol. Unlike many stable coins backed by fiat currency or centralized reserves, MUSD is fully collateralized with BCH. Here users can lock BCH into Moria smart contracts and mint MUSD in return.
Launched first in a V0 experimental version and later upgraded to Moria v1, MUSD now supports a more sophisticated, market driven borrowing model. In v1, borrowers choose their own interest rate, which determines not just the cost of the loan but also the priority for redemptions , lower rate loans are redeemable first.
To protect the peg and manage risk, Moria uses an oracle system to track MUSD price on DEXes and BCH/USD price. There is also an open redemption mechanism if MUSD drifts from the $1 peg, third parties can repay loans (redeem) to restore balance. Liquidation exists too if collateral falls under a threshold under collateralized positions may be liquidated.
Importantly, Moria recently passed a security audit by Hashlock, bolstering trust in the protocol. The audit confirmed the code is secure, and the architecture respects proof of reserves and decentralization.
The idea of MUSD emerges from Bitcoin Cash’s evolution with the CashTokens upgrade (CHIP-2022-02), BCH gained native token capabilities, enabling DeFi primitives. Riften Labs (the team behind Moria) seized this, designing a stablecoin system that doesn’t rely on external fiat reserves but reuses BCH itself as collateral.
Moria V0 was more experimental , interest free borrowing, a fixed collateral ratio, and simpler mechanics. As the protocol matured, Moria V1 introduced more flexibility, risk markets, and decentralized redemption logic.
MUSD fills a crucial gap in BCH DeFi , before it, BCH holders who needed dollar pegged liquidity had few options that were truly trust minimized. As some Reddit users put it,
“Moria Money is a DeFi platform that allows you to borrow MUSD, by locking up BCH, The point is to give you access to liquidity without selling your BCH.”
By enabling BCH to serve as collateral, MUSD creates a liquidity bridge, users don’t have to sell their BCH to gain USD-pegged capital. That means BCH can be more productive , staked, held, or used in lending, without forcing users to exit to other chains or fiat.
On top of that, MUSD powers the Cauldron DEX, a BCH native decentralized exchange where users can trade MUSD -BCH and provide liquidity. It also supports Moria Cash, a payments infrastructure for merchants and users to transact stable value in a non custodial way.
Because everything is transparently backed, MUSD challenges more opaque stablecoins like USDT, especially in the BCH world. As one Redditor wrote,
“This is a game changer as BCH holders don’t need anymore to sell their stash but get decentralized USD. This is a milestone built in Satoshi’s spirit.”
While large stablecoins like USDT or USDC dominate globally, MUSD is different , it is native to BCH, fully collateralized by BCH, and transparent by design. This model appeals to users who prioritize decentralization and on-chain proof.
Using MUSD on Moria.Money
- Borrow MUSD by locking BCH collateral. In v1, they choose the interest rate and maintain a collateral ratio (initially 150%, going down to 120%).
- Repay/close their loan to unlock BCH ,repay the borrowed MUSD plus interest, then recover the locked BCH.
- Provide liquidity on Cauldron DEX , you can join MUSD-BCH pools to earn fees.
- Use redemption , third parties can repay under collateralized loans to redeem collateral, helping maintain the peg.
The Moria Dashboard provides real time metrics on supply, collateral, and peg stability.
A growing DeFi use case via lending, trading, and payments could increase demand for BCH in its utility role, not just speculation. This might gradually attract more capital and usage to the BCH ecosystem.
However, MUSD alone is unlikely to cause a sharp bull run , its role is more foundational and structural, building out real use cases for BCH that go beyond peer-to-peer cash transactions.
Final Thought.
MUSD (Moria USD) is a groundbreaking stable coin for the Bitcoin Cash ecosystem , over collateralized with BCH, decentralized, auditable, and tightly integrated with BCH native DeFi components like Cauldron and Moria Cash. Its development history from the V0 test run to the more flexible V1 shows a maturing protocol. The Hashlock security audit adds further credibility.
While it may be modest in size compared to giants like USDT or USDC, MUSD provides a unique value proposition as stable, on-chain liquidity for BCH holders, without sacrificing decentralization. Through moria.money, users can mint, redeem, and trade MUSD, while contributing to a stable coin economy native to BCH.
In a broader sense, MUSD helps strengthen the BCH ecosystem by turning BCH from a static store of value into a highly usable collateral asset. Over time, this could bolster demand for BCH, improve capital efficiency, and support a more robust on chain economic layer all while preserving the decentralized ethos of the network.
🫰https://www.riftenlabs.com/
🫰https://www.moria.money/
🫰https://www.cauldron.quest/
🫰https://coinmarketcap.com/currencies/musd-mezo/
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